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The Relationship Between Forecast Information Quality and Perfect Order Index in Supply Chains: The Role of Preventive and Corrective Inventory Actions

Author

Listed:
  • Hanin Haifa

    (Indiana University of Pennsylvania, Pennsylvania, U.S.A.)

  • Prashanth Nagendra Bharadwaj

    (Indiana University of Pennsylvania, Pennsylvania, U.S.A.)

  • Ramesh G. Soni

    (Indiana University of Pennsylvania, Pennsylvania, U.S.A.)

Abstract

This study examines the impact of forecast information quality on supply chain performance in the context of the Palestinian territories. A sample of 200 firms were involved in this research that used path analysis and structural equation modeling to analyze the survey data. The constructs of preventive costs and corrective costs pertaining to inventory management were tested as the mediating variable between forecast information quality and perfect order index, a surrogate measure for supply chain performance. The results support the hypotheses that both the forecast information quality and the corrective and preventive inventory actions have a positive significant impact on the perfect order index while the results did not support the mediating role of the preventive and corrective inventory. The discussion about the need for preventive and corrective inventory management in spite of high forecast information quality provides insights for supply chain management in companies operating in other volatile and turbulent regions around the world.

Suggested Citation

  • Hanin Haifa & Prashanth Nagendra Bharadwaj & Ramesh G. Soni, 2025. "The Relationship Between Forecast Information Quality and Perfect Order Index in Supply Chains: The Role of Preventive and Corrective Inventory Actions," American Business Review, Pompea College of Business, University of New Haven, vol. 28(2), pages 568-591, November.
    • Handle: RePEc:ris:ambsrv:021861
    DOI: 10.37625/abr.28.2.568-591
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    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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